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SAP MM Automatic Account Determination

There are many transactions in Material Management (MM) that relevant for Accounting. These transactions must be recorded in accounting documents that contain the postings made to the G/L accounts in Financial Accounting (FI). The mostly used MM transactions that relevant for FI can be seen at Accounting Journals of SAP Material Management (MM) Transactions.

For those transactions, as far as possible, the SAP R/3 System should determine automatically the G/L account numbers that are involved in the accounting journal. By doing so, we can minimize the inputs and error possibilities made by MM end-users who perform the transactions as they don’t determine the G/L account numbers.

We can do this by Automatic Account Determination process in MM configuration (T-code: SPRO). The automatic account determination process must be done together with Accounting Department.

The influencing factors that determine how SAP choose the G/L account numbers that are involved in the accounting journal for MM transactions are:

Chart of accounts of the company code
We must assign a chart of account to each company code. Several company codes can use the same chart of accounts. This process must be done in FICO configuration. You can learn how to configure FICO module in its relation with MM module at SAP FICO minimal configuration for MM posting.
SAP R/3 determines the chart of account affected by MM transaction from the company code or plant entered by user when performs a transaction.We must define the automatic account determination individually for each chart of accounts.

Transaction/event key (internal processing key)
The Transaction/event key is a key to differentiate account determination by business transaction. For example, we must differentiate G/L account posted by goods receipt transaction and posted by invoice receipt transaction.
Posting transactions are predefined for those inventory management and invoice verification transactions relevant to accounting. Posting records, which are generalized in the value string, are assigned to each relevant movement type in inventory management and each transaction in invoice verification. These contain keys for the relevant posting transaction (for example, inventory posting and consumption posting) instead of actual G/L account numbers.
We do not have to define these transaction keys, they are determined automatically from the transaction (invoice verification) or the movement type (inventory management). All we have to do is assign the relevant G/L account to each posting transaction.
You can see list of transaction key here.

Account grouping(only for transaction: offsetting entries, consignment liabilities, and price differences)
Account grouping is a key that allows us to subdivide number assignments for each transaction key in account determination.
Account grouping is also called general modification. Since the posting transaction “Offsetting entry for inventory posting” is used for different transactions (for example, goods issue, scrapping, physical inventory), which are assigned to different accounts (for example, consumption account, scrapping, expense/income from inventory differences), it is necessary to divide the posting transaction according to a further key: account grouping code.
An account grouping is assigned to each movement type in inventory management which uses the posting transaction “Offsetting entry for inventory posting”. Under the posting transaction “Offsetting entry for inventory posting”, we must assign G/L accounts for every account grouping, that is, assign G/L accounts.
If we wish to post price differences to different price difference accounts in the case of goods receipts for purchase orders, goods receipts for orders, or other movements, we can define different account grouping codes for the transaction key.
Using the account grouping, we can also have different accounts for consignment liabilities and pipeline liabilities.
You can see list of account grouping here.

Configure Automatic Postings

Automatic Postings are postings made to G/L accounts automatically in the case of Invoice Verification and Inventory Management transactions relevant to Financial and Cost Accounting.

When entering the goods movement, the user does not have to enter a G/L account, since the SAP R/3 System automatically finds the accounts to which postings are to be made using the influence factors as explain above.

We have configured the inventory posting transaction in the previous section (GR to PO).

Now, we have to configure transaction key GBB. GBB key is used for various offsetting posting entries. Within GBB transaction there are various account grouping (general modification). In this case we need to update general modification VBR with the material consumption expense account.

1. The Valuation Class is on the part number. It is an attribute of the product. Right?

2. The Valuation grouping code is an attribute of the Valuation area e.g. a plant or a warehouse, which is part of the inventory movement transaction. Right?

3. The Transaction/Event key and the Account Grouping are connected to the Business Transaction type. Right?

In all screen shots shown connecting the three/four attributes above with a GL account do not include the Account Category Reference. quote “The relationship between valuation classes and material types is established by the account category reference.”

I have a question: Do you know whether SAP can be configured to post to expense account rather than balance sheet account at goods receipt/issue? Some organizations with minimal inventories of certain items do not want to account the inventory (due to cost of physical inventory, audits, etc.) but want to book straight to expense account. They would like to keep the moving average and inventory updated. Is this possible? Your comments will be appreciated. Thanks!

I think the A/c Cat.Ref. is only used to establish many to many relationship between Material Types and Valuation Classes.Consider the following example:Mat.type Val.Classa xa ya zb xb yb zc xc yc zthis way we are is using 3-as, 3-bs, 3-cs as also 3-xs, 3-ys and 3-zs. Not only that we are using more number of lines but also it is difficult to understand. Moreover, if we assign mat.types to val. classes as above, it is against normalization rules of DataBase management bcoz they creat redundent data.I feel I should be right.regardsAnoopjeet.

Further to my post on Mar-24-09 I wld like to add that in tcode OMSK ACRef is assigned to Val.classes and then ACRef is assigned to Mat.Types thus creating relationship among val.classes and mat.types.regardsAnoopjeet

Thanks you for your response to my March 11 comment regarding posting to expense accout. I understand using K and I read the details. However, my questions is- If I want to maintain the inventory and post the purchase cost of the inventory to balance sheet a/c. Is this possible?

Is it possible to direct the gl account based on where product is shipping to? this would be for I/c stock transport mvmt 643. Business requires separate COGS gl acct by customer/ship to. So we have one plant XXXX that ships to YYYY and ZZZZ. Shipments to YYYY should have COGS 500001 and shipments to ZZZZ need to have COGS acct 500002. Any ideas are greatly appreciated.

Can someon tell me how to add an entry in the account grouping ? We have a custom movemnet type which is for vendor consignment and I want to extend this to cutomer also. Not sure how to add entry here for Customer consignment -W as the fieldsa re greyed out and no tab for new entry.

For at least a month, I have been looking for a comprehensive “journey” from Mvt Type as seen in a Schedule Line Cat to its final resting place, the G/L account, and have finally found how all the intervening pieces to the puzzle fit in. Thanks!

Is there a standard SAP report that prints this out for all Mvt Types?